Hilton, Marriott and Starwood Release Q2 2016 Results

Three of the country's largest hotel companies held their Q2 earnings calls this week. While income for the most part held steady or increased, occupancies, daily rates and RevPAR were a mixed bag across global regions and portfolio sectors.

• Hilton Worldwide reported that revenue in the second quarter of this year was $3.1 billion, a slight increase from the $2.9 billion reported for the same period in 2015. Meanwhile, occupancy for the period increased by only 0.1 pecent over the same period in 2015, to 78.9 percent, while the average daily rate rose by 2.7 percent, to $146.52. In Europe, the company saw occupancy decrease by 2 percent to 76.1 percent because of reaction to terror attacks in France and weaker travel demand.

"Going forward, we expect Brexit and other recent events in Europe to increase uncertainty and potentially hurt demand across the broader regions," said Kevin Jacobs, Hilton's chief financial officer.

Christopher Nassetta, CEO for Hilton Worldwide, said the company would be tempering its expectations for the remainder of the year because of weak corporate transient demand. "I do think, in a weaker environment, it's going to be toughter to push rates, and I think that last year we were all sort of in the mid-single digits, and our objectives were mid- to high-single digits. I think this year we're not there," he said.

• Marriott International reported its net income was $247 million, a 3 percent increase over the same period in 2015. According to Arne Sorenson, president and CEO of the company, which is in the midst of wrapping up its acquisition of Starwood Hotels & Resorts Worldwide, "While hotel peformance reflected generally slower economic growth, leisure-travel demand remained robust and group business performed well." He added, "We continue to see strong future group bookings." In North America, Marriott's revenue per available room increased by 3.2 percent in Q2 over the same period last year. On the international front, however, RevPAR inched up by just 1.9 percent. 

• Starwood Hotels & Resorts Worldwide reported mixed results for the second quarter of the year. The company said revenue was flat at $1.25 billion, the same as in 2015. While RevPAR at its North American properties was the strongest, with an increase of 3.4 percent year-over-year, that was due mainly to the performance of its mid-level brands such as Aloft and Four Points by Sheraton, which outperformed luxury brands such as Le Méridien, St. Regis and W hotels. RevPAR in Europe increased by a slight 1.1 percent and by 2.9 percent in Asia compared with 2015, while it plunged by 9.7 percent in Africa and the Middle East and by 5.1 percent in Latin America. The company remains confident, however, that its merger with Marriott International will boost Q3 results and is predicting that third-quarter RevPAR growth will increase by around 5 percent.